They are also solely or partly owned by the government which usually allot specific commercial activities to them.
In the report, the World Bank stated that corruption in SOEs has gained prominence in recent years due to high-profile scandals in countries like Brazil, South Africa, Angola, and Malaysia.
The bank explained that corruption risks in SOEs arises from various sources such as monopoly or quasi-monopoly rights which provide an opportunity for abnormal profit generation.
It also said risks arise in SOEs from weak legal and regulatory frameworks, corporate governance weaknesses, lack of transparency and disclosure of finances as well as limited effective government and citizen oversight.
According to the bank, corrupt acts committed in SOEs with these shortcomings have defining effects on the economies of countries and government’s abilities to provide critical public goods and services.
